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Are you tired of not being to save anything at the end of the month? Are you looking for debt solutions? Well, debt management solutions can be broadly classified under four categories. Each solution comes with its own set of advantages and disadvantages and you can choose your option depending on your personal circumstances and level of debt. Loan Consolidation under Mortgages Mortgage refinancing is a good solution if you own a home and have equity in your property (this means that the property worth is more than what you owe on it). You could release the equity in order to pay off high risk personal loans and unsecured debts such as credit card bills and store debts which normally attract high rates of interest. This is called consolidated mortgage loan and the advantage of this is that interest rates will be lower than what you would pay for unsecured loans. The flip side is that it may take longer for your loan to get paid off and in the eventuality of your failure to keep up with payments; you risk your home being repossessed. Debt Management Plan Professional debt management companies can facilitate an arrangement between you and your creditors by which you can be allowed to make a reduction in your monthly payments. Such informal arrangements usually apply to unsecured debt only. Good debt consolidation companies have contacts with major creditors and will be able to provide you with a well organized, smooth flowing schedule for repayment. If you get letters or phone calls from your creditors, you can forward these to the debt management company who will respond on your behalf. The amount you pay for services would be affordable and is usually worked out by taking your monthly expenses and income into account. Whatever is left after deducting cost of living would go towards loan repayment to your creditors. However, you might end up paying for a longer period of time and your debts will take more time to get cleared off. Debt Agreements These are legally binding agreements between debtors and creditors and facilitated by certified debt negotiator companies. The benefit of a debt agreement is that you can avoid bankruptcy, have frozen interest rates, benefit from affordable payment plans instead of taking high risk personal loans and put an end to legal action and recovery process initiated by creditors. The downside is that it will be recorded in your credit file and it will affect your future prospects for obtaining credit. You would have to disclose to creditors that you’re in a Debt Agreement. Bankruptcy Option This should be the last resort for those with serious debt problems. It’s far reaching consequences include sale of assets to cover payment of outstanding debts, making timely contributions from income, restricted permission for overseas travel and ruin of credit ratings. Importance of Exploring All Avenues Debt agreements and bankruptcy should be considered with extreme caution and foresight and that too, when all other means of debt consolidation, repayment and management have been explored. It’s best to speak to your creditors and see if it’s possible to make a hardship proposal or organize a payment arrangement with reduced monthly payment. Professional debt management companies with vast, practical experience in dealing with complex cases can surely help you find a solution for all your debt problems. Book a consultation and see how they can help you. Author Bio: Author has many years of experience in content writing. He is the most celebrated and acclaimed author in financial sector. Now he is providing information on high risk personal loans and debt management companies.
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